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#1

In discussing a recent trade with @LuckyStrikes, we got to talking about our respective valuation methods and how we evaluate a trade. I was under the impression that most people evaluated a trade the same as me, but came to find most do not. I’m starting my 3rd year of ottoneu. I’m not a veteran, but not a rookie either. I still have a lot to learn. I continue to learn here and on Slack by sharing information with others. Hopefully this post will help others learn as well.

When I started to evaluate trades, I used to look heavily at surplus. If I received more surplus, I thought I was winning the trade. This isn’t always the case. An elite player with a few dollars of surplus is worth a lot more than a fringe player with a few dollars of surplus. Just because they have equal surplus, does not make them equal.

I evaluate trades by adding (1) the value I have set for the player + (2) the player’s surplus value, which equals his total value. An example would be in a trade I discussed with Trey, where we were negotiating my \$4 Ozzie Albies. I personally value Albies as a \$20 player, with upside to be much more in the future. Maybe that’s a crazy valuation, but that’s my valuation. Therefore, at \$20, Albies has \$16 in surplus. Hence, his total value to me is \$20 (my value) + \$16 (surplus value) = \$36 in total value.

When asking for a return for Albies, I will use this same formula to ensure I receive at least \$36 in total value in return. If I do not, I won’t do the deal.

Note, when evaluating trades involving multiple players, consider the value of a roster spot, which people in the community generally value at \$1-2 per roster spot. Be sure to add these values into your “total value” equation when considering trading multiple players, like in a 2-for-1 or 3-for-1 scenario. If you are receiving less players than the other team, you are opening up roster spots on your team, which have value. If you are receiving more players than the other team, you are losing roster spots, which also has value. Keep that in mind.

I’d love to hear everyone’s thoughts on my methods. I hope this post helps owners new and old when evaluating trades (and that I didn’t just give away too many secrets to my competitors!!!).

#2

That’s really interesting. I’m starting my 4th year in Ottoneu, and I’ve started making the exact same calculation. There are other factors, such as budgets and cut deadlines and trade deadlines and positional needs (and those other factors skew the calculation a little based on the compete/rebuild status of your team), but I think you’ve summed up the primary issue very well.

#3

Your description is very similar to how I value a trade. Your post now makes me wonder how @LuckyStrikes values a trade if he does it differently than that. Or how others might value a trade if many people do it differently.

The one thing I’ll say though is that prospects don’t fit into this type of trade evaluation at all. You either have to come up with some future value for them or use a different method to value them.

#4

I’m glad Justin posted this because I think the discussion is very helpful for those new to the game (anyone, really).

I think in general most people do use some form of this calculation to establish value, though I would caution against taking such a hard line on precise values. And to @walkerpilot point, this can be a dangerous (and almost impossible) task when evaluating prospect value, which is essentially what Albies is in this scenario.

When it comes to evaluating player value in the context of trades, I think there is a spectrum of philosophy, even though the entire spectrum can rest comfortably on the process Justin outlines above. Personally, I’m on the far end of the spectrum that places much greater emphasis on perceived player value (which I see as very, very fluid, almost changing day to day) than actual player value, partly because I think calculating exact player values is very difficult (part of that fluid belief), and partly because I (personally) feel very comfortable extracting (squeezing) real value out of any surplus I think I can land. Some people do not feel that comfortable in their ability to spend that surplus wisely at auction, so they would prefer to hold more “real”, calculated value in a more expensive player.

The a long way of saying I feel like I’m better at playing the players around the table than I am counting cards.

Here’s a good reference article that hits on Justin’s process above: https://www.fangraphs.com/fantasy/ottoneu-101-production-salary-surplus-value/

#5

And from an article posted recently by the @eamuscatuli:

First, consider an offer of a \$75 Mike Trout (assume Trout is worth \$71) for a \$20 Cody Bellinger (assume Bellinger is worth \$25), which side do you want in an off-season trade? If all you care about is production, Trout is the winner, but you’ve ignored the value that Bellinger AND \$55 at auction provides. If all you care about is surplus, Bellinger is the winner, but now you’ve ignored inflation.

The way I balance those factors is to calculate inflation adjusted surplus- Trout may cost \$4 more than he’s worth, but in a league with 20% inflation he’d actually be expected to cost \$85 at auction (\$71 * 1.20= \$85), providing \$10 in inflation adjusted surplus (\$85 adjusted value less \$75 salary). In that same 20% inflation league Bellinger would be expected to cost \$30 (\$25 * 1.20= \$30), providing \$10 in inflation adjusted surplus (\$30 adjusted value less \$20 salary), making Trout and Bellinger an even trade given our inflation and player value assumptions.

#6

I think I am in same camp. Or at least the same vicinity. Since value is derived from both knowns (salary, roster spot, immediate position eligibility, etc.) and unknowns (immediate production, future production, future position eligibility, injury risk, etc.) I tend to place less emphasis on weighing the factors and calculating a numeric ‘valuation’ for every player. Instead I monitor the knowns first and foremost and rely on unknowns as the tie breakers.

As a result, I tend to not own ‘expensive’ players for very long. I end up dispersing my team dollars more evenly across my roster. I find that way I can control/react for the unknowns a little more.

#7

Inflation-adjusted surplus is an important nuance. But I think looking at ONLY surplus puts too much emphasis on high-upside young players. That’s why I appreciate the OP reminding us to add the expected production value to the (inflation-adjusted) surplus. I also find it more realistic to tweak the inflation calculation in a non-linear fashion (upward at the high end and downward at the low end), because high-end assets are rare and tend to absorb a disproportionate amount of the available cash.

#8

I greatly appreciate all the comments here…a very thorough discussion in a short thread.